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Bruce Banner

Countrywide profits collapse 98%

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Foxtons profits down 64% too.

http://www.thisismoney.co.uk/money/markets/article-4735006/Torrid-day-UK-s-largest-estate-agents.html

Quote

Torrid day for leading UK estate agents as London slowdown hurts profits at Foxtons and Countrywide

  • Supply of properties listed in London fallen around 13% in first six months 2017
  • Foxtons profits drop 64% and Countrywide collapses 98%, worse than expected
  • Countrywide decides not to pay interim dividend, damaging investor sentiment  

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If people can't get the credit they can't buy the house....period.

If people can buy the house, they see that they get something better for less.....why buy something for such poor value that all your peers would call you foolish, an idiot paying that much for nothing much.....a fool and their borrowed/gifted money are easily parted.....work for it and you sure know the real value of it.;)

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25 minutes ago, longgone said:

98% 

does the 2% cover operating costs ? :lol:

Profits are after operating costs. So they would be covering operating costs. 

Next year though they'll be losing their tenancy fees income line. Then they likely wont cover costs without reducing them and since the main cost for them is headcount.......

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3 minutes ago, adarmo said:

Profits are after operating costs. So they would be covering operating costs. 

Next year though they'll be losing their tenancy fees income line. Then they likely wont cover costs without reducing them and since the main cost for them is headcount.......

sounds like they are going byebye`s 

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31 minutes ago, Sawitcoming said:

How much of this is lost business to purple bricks etc? No mention of that.

They are steadily taking over by all accounts, and will probably followed by a bunch of similar setups like that new one that charges less than £100. Was only a matter of time. Now give it a recession, and you'll see the cheaper offerings in even more demand.

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2 hours ago, adamLancs said:

They are steadily taking over by all accounts, and will probably followed by a bunch of similar setups like that new one that charges less than £100. Was only a matter of time. Now give it a recession, and you'll see the cheaper offerings in even more demand.

So Foxtons are Shitting Bricks

Edited by Tapori

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These parasites once charged me and Mrs P £600 in rental fees.............detailed in another thread where I spew venom.

Nice house,but the fees were OTT and we were in a hurry.They then tried to ramp the rent up after 6 months,which was fine until I checked with the LL and he'd not told them to raise the rent.

Deserve to go under.

Thar she blows....................................picture paints a 100 words.

CWD2.gif

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1 hour ago, adamLancs said:

They are steadily taking over by all accounts, and will probably followed by a bunch of similar setups like that new one that charges less than £100. Was only a matter of time. Now give it a recession, and you'll see the cheaper offerings in even more demand.

PB are still only 5% of the market but the momentum is clearly going that way.

 

I think a seismic shift will occur in the downmarket as people circumvent traditional sales routes.

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1 hour ago, adamLancs said:

They are steadily taking over by all accounts, and will probably followed by a bunch of similar setups like that new one that charges less than £100. Was only a matter of time. Now give it a recession, and you'll see the cheaper offerings in even more demand.

For most people selling an average house,all they really need is an online portal that gets hits and a decent conveyancer.They can show people round themselves.

I think Rightmove margins will come under pressure as well.Eventually,I can see people cutting out the middleman and going straight to PB's website.

 

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12 minutes ago, Sancho Panza said:

These parasites once charged me and Mrs P £600 in rental fees.............detailed in another thread where I spew venom.

Nice house,but the fees were OTT and we were in a hurry.They then tried to ramp the rent up after 6 months,which was fine until I checked with the LL and he'd not told them to raise the rent.

Deserve to go under.

Thar she blows....................................picture paints a 100 words.

CWD2.gif

When their shop is boarded up you should go and rip the copper out of the walls.

That's if the newly redundant EAs aren't dangling from the light fittings.

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http://www.propertyindustryeye.com/newsflash-revenues-and-profits-plunge-at-both-countrywide-and-foxtons/

This is the death knell for big High St EA's.Their smaller local counterparts will ahve some traction particualrly if they own their own office.Otherwise it's the rubbish bin for them

The CEO is swimming ......river......Egypt.

 

'Profits plunged at Countrywide in the first half of this year.

An operating profit of £28.3m in the first half of last year plunged to £6.5m, while revenue was down from £370.3m to £333m.

Sales transactions were down from 33,940 to 27,100.

CEO Alison Platt was defiant, saying: “We are building a stronger business for our future and remain on track to broaden our digital capability, reduce our operating cost base and strengthen our balance sheet.”

But she admitted: “The first half of 2017 was tough for the Group.”

She added that the same period last year had been boosted by “the high levels of housing transactions brought forward in time as a result of the Stamp Duty changes and the EU referendum. Our income versus the first six months of 2016 is down 10% and our adjusted EBITDA down 26%.”

Platt said Countrywide had made “real progress in extending our multichannel offering”.

She went on: “On 31 July we will have completed the rollout of our digital fixed price proposition to 50% of our branches.

“This offer gives our customers the choice to transact digitally and at a fixed cost but with the assurance that they are able to upgrade to the full service proposition in branch without losing the money they have already paid.

“We have increased traffic to our estate agency websites, have been invited to carry out more market appraisals and have won more instructions.

“We have held or gained market share in the instructions that have the new offering and also learned that, even where our digital proposition is available, over 95% of customers still choose to take advantage of the services we offer in branch, confirming what we expected: that a combination of digital capability and local market expertise is what customers really want.”

The company said this morning it will not be paying its shareholders an interim dividend.:huh::huh:

At Foxtons, there will be a dividend,:huh::huh: although lettings and sales revenue were both down – by 2% and 29% respectively – for the half year ending in June.

Lettings revenue was £32.1m, and sales revenue was £22.2m. Like Countrywide, it also cited the sales surge of spring last year.

Profits before tax at Foxtons were £3.8m down from £10.5m. Revenues were down just over £10m, from £68.8m in the first half of last year, to £38.5m.

Chief executive Nic Budden said: “Our performance has been resilient in the context of a London property market that has been further impacted by unprecedented economic and political uncertainty.”

Both firms were this morning reporting to the stock exchange.

City analyst Anthony Codling, of Jefferies, said of Countrywide that it “is doing the right things” in “taking out costs, offering complementary digital services and growing the financial services division. However the costs of this strategy are being felt before the benefits and whilst it is difficult to see Countrywide receiving any help from the underlying housing market, we do see silver linings amid the clouds”.

Of Foxtons, he said that its results were at the top end of expectations, amid the “dreadful” London sales market. He described Foxtons as a fighter, with the stamina to stay in the ring for many more rounds to come.

In early morning trading, shares in Countrywide fell heavily. In the first 40 minutes, they were down about 10% to just under 150p.

Foxtons shares fell about 5% to 91p.'

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5 minutes ago, Ah-so said:

And this is just the start....

Exactly, we haven't really seen that much downward price movement as of yet, just imagine when the crash really does get underway and the lettings fee ban comes in...

https://www.countrywide.co.uk/about/high-street-brands/

Quote

High Street Brands

The UK's largest estate agency and lettings network.

Our Estate Agents

The Countrywide estate agent network consists of over 50 household high street brands, many of which have been established for decades. We have thousands of properties currently listed with our agents and although our size gives us extensive UK coverage, we never lose sight of the fact that local knowledge is vital. Our network of interlinked offices gives us the broadest exposure of any estate agent, allowing us to market our properties and related services to the widest audience possible.

Our Letting Agents

Countrywide Residential Lettings is the UK's largest specialist lettings business, offering a range of tailored rent and lettings services and property management expertise to landlords and tenants across the UK. With over 600 offices nationwide operating under locally recognisable brands, we have over 74,500 properties under management across the UK and have over 5,000 applicants registering with us each week.

 

Edited by Barnsey

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27 minutes ago, Barnsey said:

Exactly, we haven't really seen that much downward price movement as of yet, just imagine when the crash really does get underway and the lettings fee ban comes in...

https://www.countrywide.co.uk/about/high-street-brands/

 

I don't think they care about prices tbh, what they want is transactions and they've dried right up! People will need to move sooner or later though and they'll likely just shut down the branches losing money. The larger ones in expensive towns will tend to carry the others, maybe not Countrywide since you'd want your head reading to use any brand in that group, but generally this seems to be the case. 

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2 hours ago, longgone said:

sounds like they are going byebye`s 

They're probably in for a hard time but they've been around a very long time. I even used to work for them (16 years ago) before I went to university. 

Strangely in my second incarnation as an accountant I was consulting with them a couple of year ago as they were looking to purchase a chain of offices. From what I can tell (from working for them) they seem to buy up a chain with a good reputation, run it into the ground and capitalise on all that goodwill until nobody uses them and then they dissolve the chain. It's a bit like he move Independence Day with the Aliens turning up to destroy a planet - although I guess they are buying the company first at least. 

I would guess they'll survive... possibly even by buying up Purple Bricks. 

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25 minutes ago, Ah-so said:

And this is just the start....

Indeed.......

21 minutes ago, Barnsey said:

Exactly, we haven't really seen that much downward price movement as of yet, just imagine when the crash really does get underway and the lettings fee ban comes in...

https://www.countrywide.co.uk/about/high-street-brands/

 

http://www.countrywide.co.uk/media/59695/final-results-for-the-h1-to-30-june-2017.pdf

 

                        H1 2017               H1 2017

appendix 1     Transactions          Average fee            2016 FY Transactions           2015 FY transactions

Regions           20693                   2390                      50396                                     50362

London            4351                     8253                      10091                                     12094

Given the hammering lettings revenue will take post ban,you can clearly see the decline in transactions as they haemorhage market share,To make up for that,tehy're offering sub £1000 digital fees..............................undercutting themselves if you will

This is only going to end one way.

 

 

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13 minutes ago, adarmo said:

I don't think they care about prices tbh, what they want is transactions and they've dried right up! People will need to move sooner or later though and they'll likely just shut down the branches losing money. The larger ones in expensive towns will tend to carry the others, maybe not Countrywide since you'd want your head reading to use any brand in that group, but generally this seems to be the case. 

See above,I suspect the transactions are moving through other hubs rather than the traditional branch network EA's.They have a lot of room to cut costs given their purchases of neighbouring local EA's

Edited by Sancho Panza

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9 minutes ago, adarmo said:

They're probably in for a hard time but they've been around a very long time. I even used to work for them (16 years ago) before I went to university. 

Strangely in my second incarnation as an accountant I was consulting with them a couple of year ago as they were looking to purchase a chain of offices. From what I can tell (from working for them) they seem to buy up a chain with a good reputation, run it into the ground and capitalise on all that goodwill until nobody uses them and then they dissolve the chain. It's a bit like he move Independence Day with the Aliens turning up to destroy a planet - although I guess they are buying the company first at least. 

I would guess they'll survive... possibly even by buying up Purple Bricks. 

That was my experience exactly.We had been renting with a local EA who sold to them,then they burned the business into the ground with high fees etc .Last time I checked they had four houses to let.When they first took it over a year before,it was 30+.........incredible to see,

And even worse,they paid top dollar for said local EA.

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2 hours ago, Calcutta said:

When their shop is boarded up you should go and rip the copper out of the walls.

That's if the newly redundant EAs aren't dangling from the light fittings.

Just push their bodies out of the way.

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56 minutes ago, Sancho Panza said:

That was my experience exactly.We had been renting with a local EA who sold to them,then they burned the business into the ground with high fees etc .Last time I checked they had four houses to let.When they first took it over a year before,it was 30+.........incredible to see,

And even better worse,they paid  top dollar for said local EA.

 

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